Maya Energy Lease Agreement May Violate State Law

“Leasing out Commission land for unrelated commercial development is clearly beyond the scope of the LCRBDC’s statutory authority. . .But even if there were a basis for the LCRBDC’s recent change of heart, a back-room lease deal is not an appropriate way to dispose of public land.” Sam Henderson, Hoosier Environmental Council Attorney

March 6, 2018-The Little Calumet River Basin Development Commission (LCRBDC) has given an option to Maya Energy, LLC for a 50 year lease on property near the Little Calumet River. The property was previously owned by the Indiana Department of Natural Resources according to filings with the Indiana Department of Environmental Management. Maya Energy, LLC plans to operate a materials recycling facility on the 35 acre parcel according to the documents. The recycling facility would operate primarily as an enclosed transfer station and would take in 1600 tons of household waste and 800 tons of construction and demolition debris daily.

The LCRBDC was created by Indiana Statute and has those powers and duties as set out in the statute (enabling statute). Among those powers is to:

(5) Acquire by grant, purchase, gift, devise, lease, eminent
domain, or otherwise and hold, use, sell, lease, or dispose of:
(A) real and personal property of every kind and nature; and
(B) any right and interest;
necessary for the full exercise or convenient or useful for the
carrying on of any of the commission’s powers under this
chapter.

The property in question was acquired from the Indiana Department of Natural Resources in 1981. As you can see in the above clip from the Deed, the transfer was made expressly “for the purposes” set out in the statute. Those purposes are set out in Indiana Code and are:

Promoting the general health and welfare of citizens of Indiana

Providing for the creation, development, maintenance, administration and operation of park, recreation, marina, flood control and other public works projects, including levees. (Indiana Code 14-13-2.1-32)

Further, Indiana Code indicates that “The exercise of the powers granted by this chapter is for the benefit of the people of Indiana and for the increase of their commerce, health, enjoyment, and prosperity. The operation, creation, development, and maintenance of the projects by the commission constitutes the performance of essential governmental functions. (IC 14-13-2-27 Public Purpose)

Nowhere does the statute reference economic development as a purpose of the LCRBDC. The statute does not explicity authorize LCRBDC to lease land for a municipal waste facility. Sam Henderson of the Hoosier Environmental Council states the transfer of the property to Maya Energy, LLC likely exceeds the statutory authority of the LCRBDC:

“Leasing out Commission land for unrelated commercial development is clearly beyond the scope of the LCRBDC’s statutory authority. As the Indiana Attorney General recently reiterated (Op. Atty. Gen. 2017-5 at 2), the LCRBDC’s land is held “essentially in trust, to safeguard the people’s interest in the promotion of effective, coordinated flood control.” The proposed Maya Energy facility has no relationship to that goal — and indeed, increasing the paved area in close proximity to the Little Calumet is directly contrary to the LCRBDC’s flood control purpose. Further, the LCRBDC has been holding this parcel of floodplain land in trust for nearly 40 years. There is no apparent basis for the LCRBDC’s recently-expressed opinion that this parcel now has no relationship to flood control. But even if there were a basis for the LCRBDC’s recent change of heart, a back-room lease deal is not an appropriate way to dispose of public land.”

It seems that the LCRBDC Board may actually agree with Attorney Henderson. In the summer of 2017 the LCRBDC asked for an Attorney General opinion on their authority to transfer property. (See full opinion below) After receiving the opinion from the Indiana Attorney General, the Commission adopted the following resolution providing that property would be disposed of by a license agreement and not a lease agreement in the future: